Hot Real Estate Market Causes Unexpected Glitch For Buyers, Sellers

An unexpected glitch is occurring for buyers and sellers in hot real estate markets. Many markets have a low inventory now which is encouraging buyers to make high bids on houses. This is putting sellers in an awkward position because their appraisals aren’t coming in at this value. Banks require appraisals before they will extend a mortgage, and if a buyer is attempting to make an offer for a home that is significantly above the appraised value a mortgage company usually won’t accept the package.

However, because demand is so intense buyers cannot purchase houses at any lower than this and sellers cannot sell houses any lower than this. This means that many buyers are not able to purchase houses because the mortgage companies will reject the deal. This glitch may not be fully resolved until appraisals are adjusted for the hot real estate market, and until then buyers and sellers may both be caught in a glitch that makes it difficult to complete a real estate transaction for the true value of a home. Right now the only thing a buyer can do is put more down on the home to compensate for the high prices.

For more information about the new developments in the real estate market contact Cary Amo, your Lafayette agent.